Agroholding STEPPE

Steppe Agro Holding is a major player in the Russian agricultural sector, and owns a diversified portfolio of assets in four key segments: crop farming, dairy farming, fruit farming and vegetable farming. Agro Holding's assets are located in four regions of southern Russia – Krasnodar, Stavropol, Rostov and Karachai-Cherkessia – which offer the most favourable climate, crop yields and logistics. Steppe Agro Holding holds a 50% equity stake in RZ Agro, a joint venture with the Louis Dreyfus family.

Business description

Steppe Agro Holding is a large agricultural holding with land assets of 315,000 ha, operating in four high-potential agricultural segments: crop farming, dairy farming, fruit farming and vegetable farming.

Steppe Agro Holding operates in the Krasnodar, Rostov, Stavropol and Karachay-Cherkessia regions, which are among Russia's most favourable regions for agricultural development. Soil quality and an optimal amount of precipitation in these regions make it possible to achieve high yields, while short transportation distances create advantages in terms of logistics costs.

Land crops production

Steppe Agro Holding's land assets totalled 315,000 ha as of the end of 2016, including 99,000 ha of RZ Agro. In 2016, the company acquired 178,000 ha of land.In 2016, Steppe Agro reported an all-time high grain crop of 1.04m tons. This substantial increase was achieved thanks to acquisition of new land assets and introduction of state-of-the-art agricultural technologies and agronomic discipline.

In May 2016, Steppe Agro Holding acquired 110,000 ha of land in the Stavropol and Rostov regions. The assets were fully integrated into the Holding and included in the harvesting campaign of 2016. Gross wheat harvest of the new assets was 171,800 t, an increase of 65% from 2015. Substantial growth of gross collection and yield was achieved by using the required amount of fertilisers and optimising the harvesting time. At the end of 2016, Steppe Agro Holding acquired another 68,000 ha of land, which is currently being integrated into the company.

Dairy farming

Steppe Agro Holding achieved a substantial improvement in its operational results in Dairy business from 2015.

Rodina has Russia's highest milk yield, with more than 10 tonnes a year per lactating cow.

The key event of 2016 for the dairy farming segment was receipt of a certificate confirming the farms’ compliance with European standards, allowing Steppe to supply milk for production of dairy products to be exported to the EU.

Vegetable farming

Yuzhny Agricultural Complex (acquired by Steppe Agro Holding in December 2015) is Russia's biggest producer of protected-ground vegetables, with 144 ha of greenhouses. In 2016, its gross harvest of tomatoes and cucumbers grew by 22% to 45,800 t due to an increase in land used for production from 118.5 ha in 2015 to 130.5 ha in 2016, and an increase in the average yield from 31.6 kg/sq m in 2015 to 35.1 kg/sq m in 2016.

In 2016, Yuzhny began implementing a programme to increase operational efficiency: it expanded the area of land under seedlings from 6 to 12 ha, which enabled it to start planting earlier and begin harvesting in November.

Apple orchards

Steppe Agro Holding owns two fruit-farming assets: OJSC Trudovoye and LLC Sady Kubani. At the time of acquisition, the area of intensive orchards was 630 ha. In 2016, the company planted another 150 ha of orchards, which are expected to reach their projected yields in 2018. The total area of the holding's orchards had reached 780 ha by the end of 2016. The gross apple output of Steppe's farms grew by 5% in 2016 to 15,900 t. The orchard yield also grew by 5%, to 42.1 t/ha.

RZ Agro (Sistema's stake is 50%) is a major producer of grain and oil crops in southern Russia with a land bank of 99,000 hectares. It is controlled jointly by Sistema and members of the Louis-Dreyfus family, and comprises six farms grouped into three regional clusters in the Rostov and Stavropol regions.